All Canadians concerned about auto insurance: lawyer

Two members of the Ontario Trial Lawyers Association appeared before the Public Utilities Board (PUB) automobile insurance review hearings in St. John’s Wednesday afternoon to relate their experience with changes to the automobile insurance system in their province.

Allen Wynperle, president-elect of the association, and John Karapita, its director of public affairs, said cuts and changes to the system in Ontario over the past eight years have seen people injured in automobile accidents getting less paid out for damages and treatment.

Both men said when they heard what the Insurance Bureau of Canada (IBC) was proposing for the insurance industry in Newfoundland and Labrador — and that the IBC had written to Newfoundland and Labrador politicians — they contacted lawyers in this province representing the Campaign to Protect Accident Victims to offer their opinions to the PUB.

“Over the last 10 years, mostly, there have been significant complaints by the insurance industry of lack of profitability, and there have been significant complaints from insureds that they’re paying too much for premiums,” Wynperle said.

“The premiums in Ontario seem to be, from everything we understand, the most expensive in the country.

“In Ontario, pain and suffering damages are not given at all to an injured person unless their injuries are serious and permanent. There is a deductible of $38,000, unlike your $2,500 deductible, and we have mostly juries who decide these cases in Ontario and they don’t know about the deductible. So, if they think they’re giving somebody $50,000, then they believe they’re giving somebody $50,000. They don’t know that $38,000 of that is going back to the at-fault driver’s insurance company. That’s done afterwards by a judge.”

The PUB in Newfoundland and Labrador has been directed by the provincial government to study the effect on insurance rates of a monetary cap on claims for non-economic loss of minor injuries and the implications of such a cap on claimants. The PUB has also been asked to review the effect on insurance rates of continuing with the current deductible of $2,500 or increasing the deductible. The board is also considering options regarding a definition for minor/mild injuries.

The PUB was also asked to conduct an audit of taxi closed claims to determine the causes of poor claims experience, including details regarding the underlying causes of loss and high claim costs incurred, and provide any recommendations to reduce claim costs and reduce rates.

Wynperle and Karapita say Ontario’s no-fault auto insurance system is a failed tradeoff between the no-fault and tort coverages in Ontario and a legacy of legislative tinkering that has left injured accident victims and the premium-paying public with some of the worst coverage and highest premiums in Canada since the system was introduced in 1990.

Wynperle added that some of the most affected in Ontario are seniors.

“They don’t have claims for loss of income because they’re retired, generally speaking, and pain and suffering damages mean a lot to them, and taking that away has seriously affected the rights of senior citizens,” he said.

“It is a very hard thing to tell someone whose life has been dramatically affected, their quality of life has been dramatically affected, there is very little or nothing I can do for you because the cost of taking a case to trial is worth far more than your pain and suffering damages once we take off the deductible, or in a situation like where you are taking a huge risk with a senior in a situation where the case might be capped at $7,500 or something like that. It is not something they deserve after a lifetime’s worth of work.”

The IBC maintains that the imposition of a $5,000 cap in Newfoundland and Labrador, plus other reforms that will give accident victims faster access to health care and thus a quicker recovery, is the best option to stabilize insurance premiums. Minor injury compensation caps are in place in other provinces.

The Campaign to Protect Accident Victims says accident victims will lose their right to sue for fair compensation if a compensation cap is imposed.

Wynperle, after being questioned on why he decided to take time to come before the PUB in Newfoundland and Labrador, said all Canadians are facing the same problems regarding automobile insurance.

“The insurance companies are complaining and are concerned, and are putting political pressure on elected officials because they believe the product is not profitable, but at the same time we all face the same difficulty in that we do not have the necessary financial data, audited verifiable financial information, in order to allow us to make decisions,” he said.

“Not just politicians, but all stakeholders within the industry, should have that information available before any decisions are made, and we see an ongoing miscarriage in the way things are being done in our province, and we hope to help show you some of the pitfalls that we have faced in order that you not face those as well.”